The leadership of ExxonMobil suffered a significant setback on 26 May when two members of the activist investor fund Engine No. 1 were elected to the company’s board of directors.
Eight company-backed candidates, including chief executive Darren Woods, were re-elected, with ExxonMobil saying the votes for two other board seats were too close to call.
Engine No. 1 has a 0.02% stake in ExxonMobil, but has targeted the company for a perceived lack of effort on climate issues and general underperformance. The fund’s stance drew considerable support from a number of major Exxon shareholders, which led to the election of Gregory Goff and Kaisa Hietala.
ExxonMobil was dealt an additional black eye when two shareholder-introduced measures calling for full disclosure of political lobbying and climate lobbying were approved over the company’s recommendation against them.
In an extraordinary move, ExxonMobil’s leadership team adjourned the annual meeting for an hour for move votes to be counted. After the meeting was called back to order, Woods answered pre-submitted questions from shareholders in order for more votes to be cast.
Engine No. 1 quickly released a statement savaging ExxonMobil for the delays, accusing it of trying to get the votes to change the results in their favor.
“Shareholders should not be fooled by ExxonMobil’s last-ditch attempt to stave off much-needed board change in response to significant shareholder pressure and the prospect of losing a proxy contest,” the activist firm said. “ExxonMobil should accept the result, take the vote, and move forward.”
While ExxonMobil has taken criticism from Engine No. 1 and other groups for slow movement on climate change, investors have also been displeased with the company’s performance as a whole.
Since hitting a high of $95.12 per share on the New York Stock Exchange on 15 June, 2016, the value of ExxonMobil’s stock has dropped significantly. The company’s stock bottomed out at $32.78 in early November 2020, but had only recovered to $58.64 per share on the afternoon of 26 May.